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The Fuse
Market futures are up modestly after a strong Monday session. It seems everyone is waiting on the CPI for January, which is expected to come in rather hot compared to the last couple of months. Estimates call for a .4-.5% gain month/month, but more than 6% year/year. These numbers are far too hot for the Fed and coupled with the very strong jobs report, it appears more hikes are likely. Fed futures are now pricing in 3 more rate hikes, and some futures even have a trickle of 6% funds rate being priced.
Testing the 4100 level again was successful Sunday night and into Monday. We’ll see if that holds and 4200 is once again in play. The oscillators were mildly oversold last Thursday, breadth was pretty strong Monday but put/call remains elevated. We are in front of a 3 day weekend and often see volatility fall. Today is the last day of trading for the February vix future, Wednesday is the start of March trading. The term structure of volatility is in contango, which is bullish.
News
The Internals
What’s it mean?
A continuation of the uptrend from Friday, solid internals all day long resulted in a strong trend day (bottom, second from the left). VOLD also was strong with a breakout late in the day. I mentioned in the chat room the possibility of a ‘jam higher’ into the close earlier in the session, and that indeed happened with so many buy programs left to execute. Notice volatility (vix) slanted downward, certainly no fear in the CPI number or other data to be released this week.
The Dynamite
Economic Data:
- Tuesday: CPI for January
- Wednesday: Retail sales, industrial production, empire state, biz inflation expectations
- Thursday: PPI, philly fed index, jobless claims, housing starts
- Friday: import/export prices
Earnings this week:
- Tuesday: KO, MAR, UPST, ABNB, DVN
- Wednesday: RBLX, TTD, ROKU SHOP, TWLO, BIIB
- Thursday: DDOG, CROX, SHAK, DKNG, AMAT
- Friday: DE, AN, AMC